EXHIBIT 10.21
EMPLOYMENT AGREEMENT
AGREEMENT, by and between POLAROID CORPORATION, a Delaware corporation,
together with its permitted successors and assigns (the "Company"), and XXX X.
XXXXXX (the "Executive") entered into this 2ND day of MARCH, 2001, effective
December 1, 2000.
W I T N E S S E T H:
-------------------
WHEREAS, the Executive has important management responsibilities which
benefit the Company and the Company believes that its best interests will be
served if the Executive is encouraged to remain with the Company; and
WHEREAS, the Company desires to continue the employment of the
Executive and the Executive desires to continue such employment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Company and the Executive (individually a "Party" and
together the "Parties") agree to enter into the following agreement (this
"Agreement"):
1. DEFINITIONS.
(a) "ANNUAL BONUS" shall mean a bonus amount payable under the
Company's executive annual bonus plan (currently the Polaroid
Incentive Plan for Executives).
(b) "BASE SALARY" shall mean the annual rate of base salary
(disregarding any reduction in such rate that constitutes
Constructive Termination) as provided for in Section 3 below,
as increased by the Board from time to time.
(c) "BOARD" shall mean the Board of Directors of the Company.
(d) "CAUSE" means:
(i) The Executive's willful malfeasance having a material
adverse effect on the Company; or,
(ii) The Executive's conviction of a felony;
provided, that any action or refusal by the Executive shall
not constitute "Cause" if the Executive shall be entitled,
under applicable law or under an applicable Certificate of
Incorporation or By-Laws of the Company, as they may be
amended or restated from time to time, to be indemnified with
respect to such action or refusal.
(e) "CONFIDENTIAL INFORMATION" means nonpublic information
relating to the business plans, marketing plans, customers or
employees of the Company other than information the disclosure
of which cannot reasonably be expected to adversely affect the
business of the Company.
(f) "CONSTRUCTIVE TERMINATION" shall mean:
(i) the reduction in the Executive's job title or level
as Executive Vice President;
(ii) a change in the Executive's reporting relationship to
anyone other than the Chief Executive Officer; or the
provision of significantly less favorable working
conditions; or
(iii) unless effected with the Executive's consent, a
reduction in the Executive's Base Salary or the
discontinuation or any reduction in the Executive's
participation or membership in any bonus, incentive
or other benefit plan in which the Executive was a
participant or member, without an economically
equivalent replacement.
(g) "DISABILITY" shall mean the Executive's disability within the
meaning of the Polaroid Long Term Disability Plan.
(h) "SEVERANCE PERIOD" shall mean the period of twenty-four (24)
months following such termination.
(i) "STOCK" shall mean the outstanding shares of Common Stock of
the Company and any other shares of capital stock of the
Company into which the Common Stock shall be reclassified or
changed.
(j) "SUBSIDIARY OR SUBSIDIARIES" of the Company shall mean any
corporation of which the Company owns, directly or indirectly,
more than fifty percent (50%) of the Voting Stock.
(k) "TERMINATION DATE" shall mean the date of the Executive's
termination of employment from the Company.
(l) "VOTING STOCK" shall mean capital stock of any class or
classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. POSITION, DUTIES AND RESPONSIBILITIES. The Executive shall be employed
as an Executive Vice President of the Company; and the Executive's
responsibilities shall be consistent with this position. Subject to the
conditions set forth in this Agreement, the Executive's position and
responsibilities may be changed from time to time by the Company, as it
deems necessary. The Executive shall dedicate full time to carrying out
the Executive's responsibilities and shall act in the best interests of
the Company at all times. The Executive shall comply with the Company's
policies and procedures. Anything herein to the contrary
notwithstanding, nothing shall preclude the Executive from:
-2-
(i) Serving, subject to the approval of the Board, on the boards
of directors of a reasonable number of other corporations or
the boards of a reasonable number of trade associations and/or
charitable organizations;
(ii) Engaging in charitable activities and community affairs; and,
(iii) Managing his personal investments and affairs, provided that
such activities do not interfere with the proper performance
of his duties and responsibilities in the Company.
3. BASE SALARY. The Executive shall be paid an annualized Base Salary,
currently U.S. $350,000, payable in accordance with the regular
payroll practices of the Company. The Base Salary shall be reviewed
periodically by the Board.
4. RELOCATION BONUS. The Executive shall receive a Relocation Bonus of
U.S. $180,000 upon the execution of this Agreement.
5. ANNUAL BONUS. The Executive shall participate in the Company's annual
bonus plan using the targets and performance factors set forth in the
Company's annual bonus plan, with an annual target award opportunity
currently equal to fifty-five percent (55%) of Base Salary. This plan
is reviewed periodically by the Board.
6. DEFERRED COMPENSATION. The Company will contribute U.S. $70,000 each
year to a supplemental executive retirement plan, currently the
Polaroid Elective Deferred Compensation Plan. These funds will only be
available at the Executive's retirement.
7. RELOCATION EXPENSES. The Executive will participate in the Company's
relocation program and receive those benefits set forth in Exhibit A.
8. HOUSING. The Company will provide the Executive with a loan to assist
the Executive with the purchase of a home in the Boston area and the
terms of the loan will be set forth in a loan agreement to be prepared
by the Corporation for the Executive's review and agreement. The
Company will also pay the Executive's closing cost estimated to be
approximately $12,000.
9. EDUCATION AND OTHER PAYMENTS. The Company will reimburse up to U.S.
$7,500 per year for (i) educational courses taken by the Executive's
spouse at the university level or (ii) in the case where the
Executive's spouse cannot be admitted to such courses at the university
level, an annual payment of $7,500.00 would be made to the Executive
for other costs for other reasonable interests and endeavors of the
Executive's spouse ("allowed costs"). The reimbursements for
educational payments or payments of allowed costs will be available
through December 31, 2004, up to a total maximum for both of $30,000.
-3-
10. HEALTH CLUB MEMBERSHIP. The Company will reimburse the Executive up to
U.S. $1,500 per year for a health club membership for the Executive and
his spouse.
11. EMPLOYEE BENEFIT PROGRAMS. During the term of employment, the Executive
shall be entitled to participate in all employee pension and welfare
benefit plans and programs made available to executives at a similar
level, as such plans or programs may be in effect from time to time,
including, without limitation, long-term incentive plan(s), pension,
savings and other retirement plans or programs, medical, dental,
hospitalization, short-term and long-term disability and life
insurance.
12. SPECIAL PERFORMANCE ACCELERATED RESTRICTED STOCK AWARD (PARS). Upon the
execution of this Agreement, the Executive will receive a PARS award
that will fully vest in three (3) years and shall be subject to
accelerated vesting upon attainment of specified goals as made
available to the Executive at the time of the PARS award. This PARS
award is attached as Exhibit B and may be accepted upon execution of
this contract.
13. RETIREMENT PLANS.
(a) The Executive is eligible to make 401(K) and voluntary
after-tax contributions through the Company's current Polaroid
Retirement Savings Plan subject to change by the Company. In
addition, the Executive will receive a Company contribution of
eight percent (8%) of Base Salary in this Plan. Five percent
(5%) shall be contributed to the ESOP fund and three percent
(3%) shall be contributed to the Savings Fund. Any portion of
the Executive's contribution that cannot be made into the
Retirement Savings Plan due to the IRS limits shall be
contributed into the Polaroid Elective Deferred Compensation
Plan, a supplemental executive retirement plan. All amounts
contributed to this Plan are one hundred percent (100%)
vested.
(b) The Executive is eligible to participate in Polaroid's Pension
Plan, which is subject to change by the Company. The
Executive's prior Polaroid Subsidiary service, shall be used
to determine eligibility for participation, vesting and as the
basis for the pay credits in the Pension Plan. The benefits in
this Plan vest over five (5) years. Pay credits are made based
upon time actually in the Plan at the following rates: 4.5%
for service years 1 through 7; 6% for service years 8 through
15; and 8% for service years over 15. Amounts contributed in
excess of the IRS statutory limits shall be placed in the
current supplemental executive retirement plan.
(c) Australian Superannuation Scheme. The Executive is no longer a
resident in Australia, and therefore no longer eligible to
participate in the Australian Superannuation scheme. The
Executive represents that he has appointed a Resident Trustee
to manage his accounts in Australia.
14. VACATION. The Executive is entitled to four (4) weeks of vacation
annually, which will be administered in accordance with the Company's
vacation policy.
-4-
15. CHANGE IN CONTROL. The Executive's executed Change in Control Agreement
will remain in full force and effect and will not be affected by this
Agreement.
16. TERMINATION DUE TO DISABILITY OR DEATH. In the event the Executive's
employment is terminated due to the Executive's disability or death,
the Executive, or the Executive's estate or beneficiaries, as the case
may be, shall be entitled to:
(a) SALARY. Base Salary through the date of termination:
(b) ANNUAL BONUS. Pro-rata portion of the Annual Bonus at target
for the year in which the Executive's disability or death
occurs. The Executive shall receive his pro rata distribution
of the Annual Bonus as soon as practicable after such
determination distribution is determinable or consistent with
the Executive's election under the Elective Deferred
Compensation Plan); and,
(c) OTHER BENEFITS. Other benefits or entitlements in accordance
with applicable plans and programs of the Company.
17. TERMINATION BY THE COMPANY FOR CAUSE. In the event the Company
terminates the Executive's employment for Cause, the Executive shall be
entitled to:
(a) SALARY. Base Salary through the date of termination of
Executive's employment for Cause;
(b) OTHER ENTITLEMENT. Other benefits or entitlements, if any, in
accordance with applicable plans or programs of the Company;
however, notwithstanding the foregoing, the Executive shall
not be entitled to any bonus (annual or long term) for the
year in which his termination occurs.
18. CONSTRUCTIVE TERMINATION OR A TERMINATION BY THE COMPANY WITHOUT CAUSE.
If prior to Change in Control, the Executive's employment is terminated
by the Company without Cause, other than due to Disability or death, or
the Executive terminates following a Constructive Termination, the
Executive, upon the execution of a full and complete release, shall be
entitled to:
(a) SALARY. Base Salary through the date of termination of the
Executive's employment;
(b) ANNUAL BONUS. Annual Bonus payments for the period from the
beginning of the year in which the Executive's termination
occurs through the end of the Severance Period based upon the
actual performance of the Company without regard to any other
factors that could reduce the ultimate distribution. The
Executive shall receive his Annual Bonus payments as soon as
practicable after such determination distribution is
determinable or consistent with the Executive's election under
the Elective Deferred Compensation Plan;
-5-
(c) SEVERANCE PAYMENT. Base Salary, at the annualized rate in
effect on the date of termination of the Executive's
employment, in a stream of payments in accordance with the
Company's regular payroll schedule beginning on the regular
payroll distribution date next succeeding the Executive's
Termination Date, for the Severance Period;
(d) PENSION VESTING. The Executive shall be fully vested in the
Polaroid Pension Plan and the associated executive retirement
plans;
(e) INSURANCE. Medical, dental and executive life insurance
benefits (collectively "Insurance Benefits") at the same rate
as active employees similarly situated for the Severance
Period and thereafter for a period equal to twenty-four (24)
months following the Executive's Termination Date or until the
Executive is eligible to receive such Insurance Benefits
through another employer (this benefit shall run coterminous
with COBRA rights), whichever occurs first;
(f) OPTIONS. Full vesting of all options through the Executive's
Termination Date with the exercise period being the lesser of
two (2) years from the Executive's Termination Date or the
exercise period stated in the Executive's applicable Option or
Supplemental Option Agreement and subject to all other terms
of such agreements governing the Options;
(g) PERFORMANCE AWARDS. A distribution of a pro-rata portion of
Performance Awards (including but not limited to Performance
Shares, PARS, and Restricted Stock) as granted through the
Executive's Termination Date will be made when distributions
from similar awards are made to active employees. The
Performance Award distributions, as adjusted for the pro-rata
period, shall be based on the Company's actual performance
during the performance period for such award. Determination of
award distributions shall be on the same basis as applied to
senior officers employed by the Company at the time such
awards are delivered;
(h) OUTPLACEMENT COUNSELING. Outplacement services will be
provided consistent with the Company's outplacement practices
in effect on the Executive's Termination Date;
(i) OTHER BENEFITs. Other benefits or entitlements in accordance
with applicable plans and programs of the Company;
(j) DISABILITY COVERAGE. Short and long-term disability that is
reasonably comparable to the coverage provided to the
Executive on his Termination Date and which can be purchased
on the open market for a period equal to the lesser of
twenty-four (24) months following the Executive's Termination
Date or until the Executive is eligible to receive comparable
benefits through another employer;
(k) SURVIVOR BENEFITS. Should the Executive become eligible to
receive payments and benefits under this Section and die prior
to receipt of all such payments and benefits, the residual
payments shall be made to the Executive's beneficiary(ies).
Any residual family medical and dental benefits which the
Executive was receiving on the Executive's date of death shall
continue to the family members the Executive had covered in
such medical and dental plans on such date; and
-6-
19. NON-COMPETITION. During employment or any Severance Period pursuant to
the provisions of paragraph 18, or in no event for a period less than
twelve (12) months following any other termination of employment, the
Executive shall not engage in any activity directly or indirectly with
Xxxxxxx Kodak Company or Fuji, whether as a principal, partner,
executive, consultant, shareholder, director (other than as a holder of
not in excess of one percent (1%) of the outstanding voting shares of
any publicly traded company) or otherwise.
20. CONFIDENTIALITY. Without the prior written consent of the Company,
except to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate government agency,
the Executive shall comply with the Confidentiality Agreement Executive
executed when the Executive was hired and further shall not disclose
any trade secrets, customer lists, drawings, designs, information
regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including
data and other information relating to members of the Board and
management), operating policies or manuals, business plans, financial
records or other financial, commercial, business or technical
information relating to the Company or information designated as
confidential or proprietary that the Company may receive belonging to
suppliers, customers or others who do business with any of its
Subsidiaries (collectively, "Confidential Information") to any third
person unless such Confidential Information has been previously
disclosed to the public by the Company; is in the public domain (other
than by reason of the Executive's breach of this Agreement); or has
been disclosed to the Executive prior to the date hereof from sources
not breaching any agreement with the Company.
21. COMPANY PROPERTY. Promptly following the Executive's termination of
employment, the Executive shall return to the Company all property of
the Company including but not limited to computer(s), identification
badge, and business cards, credit cards, and all copies of Confidential
Information in the Executive's possession or under the Executive's
control whether on paper or electronic storage media.
22. MISCELLANEOUS ADJUSTMENTS UPON TERMINATION. Upon termination of the
Executive's employment, the Company shall have the right to deduct from
any cash payment due to the Executive, all amounts required by
applicable law to be withheld and in addition, any amounts which the
Executive may owe to the Company as of the Executive's Termination
Date, including but not limited to items such as company store,
corporate credit card obligations and Company property issued to the
Executive and not otherwise accounted for or returned.
-7-
23. NON-SOLICITATION OF EMPLOYEES. During employment or any Severance
Period pursuant to the provisions of paragraph 18 or for a period of
twelve (12) months following any termination of the Executive's
employment for Cause or by the Executive voluntarily, the Executive
shall not directly or indirectly induce any employee of the Company to
terminate employment with the Company, and shall not directly or
indirectly, either individually or as owner, agent, consultant,
director, officer, shareholder or otherwise, employ or offer employment
to any person who is employed by the Company.
24. NON-SOLICITATION OF CUSTOMERS. For a period of twelve (12) months from
the Termination Date, the Executive shall not directly or indirectly
solicit customers of the Company ("Customers") for the sale to the
Customers of products or services that compete with the Company's
businesses. For purposes of this paragraph, the Company's businesses
shall be limited to silver halide film, cameras and instant printing
media. Notwithstanding the foregoing, however, this paragraph shall not
preclude the Executive from directly or indirectly soliciting the sale
to the Customers of products or services that compete with the
Company's businesses if such products or services are ancillary to
products or services that do not compete with the Company's businesses.
For example, if the Executive were to directly or indirectly solicit to
the Customer the sale of cellular phones and a thermal printer and
media is offered for sale to the Customer as an accessory product or
service, such accessory product or service shall not be considered as
competing with the Company's businesses. The foregoing is intended to
be illustrative only.
25. COMPANY POLICIES. The Executive agrees that the Executive shall be
bound by all written policies established by the Company and by any
written personnel manual or written policy statement even though such
policy may be unilaterally amended, terminated or modified at the sole
discretion of the Company.
26. DISPUTE RESOLUTION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Boston, Massachusetts in accordance with the Rules of
the American Arbitration Association then in effect. Judgment may be
entered on an arbitrator's award relating to this Agreement in any
court having jurisdiction.
27. EQUITABLE REMEDIES. The Executive acknowledges that the covenants and
obligations with respect to Non-competition, Non-disclosure and
Non-solicitation relate to special, unique, and extraordinary matters
and that a violation of any of the terms of such covenants and
obligations will cause the Company irreparable injury for which
adequate remedies are not available at law. Therefore, the Executive
agrees that if the Executive shall breach any of these covenants, the
Company shall have no further obligation to pay any benefits or
otherwise may payments hereunder, and the Company shall be entitled to
an injunction, restraining order, or such other equitable relief
(without the requirement to post a bond) restraining the Executive from
committing any violation of the covenants and obligations contained in
this Agreement. The remedies in the preceding sentence are cumulative
and are in addition to any other rights and remedies the Company may
have at law or in equity as an arbitrator (or court) shall reasonably
determine. The Executive further agrees that such injunction,
restraining order, or other equitable relief may be had in any
appropriate court of the Commonwealth of Massachusetts having
jurisdiction over either Party to this Agreement
-8-
or over the subject matter of this Agreement, and more particularly,
may be enforced by a proceeding in any such court of the Commonwealth
of Massachusetts.
28. INTENTION OF THE PARTIES. If any provision of this Agreement is
determined by an arbitrator (or a court of competent jurisdiction) not
to be enforceable, the Executive agrees that it is the intention of the
Parties that such provision should be enforced to the maximum extent
possible under applicable law and that such arbitrator (or court) shall
reform such provision to make it enforceable with the intent of the
Parties.
29. GENERAL COVENANTS.
(a) During employment and the Severance Period or twelve (12)
months following a termination of employment, whichever is
greater, the Executive agrees on the Executive's own behalf
and on behalf of the Executive's agents and representatives,
not to engage in any public criticism regarding the
Executive's employment with the Company or to make any
negative, detrimental, or derogatory comments concerning the
Company or its stockholders, directors, officers or employees,
past and present, and the Company agrees not to engage in any
public criticism regarding the Executive's employment with the
Company.
(b) The Executive shall not disclose the terms of this Agreement
unless required to do so by law; provided, however, that the
terms of this Agreement may be disclosed in confidence to the
Executive's attorneys and tax or financial consultants. Before
disclosing the terms of this Agreement to anyone as permitted
under this paragraph, the Executive shall first obtain an
agreement from the person receiving the information that he or
she will not disclose the terms of the Agreement to any other
person. The unauthorized disclosure of the terms of this
Agreement by any person shall constitute a violation of this
Agreement by the Party who initially disclosed the terms of
this Agreement. If and when this Agreement becomes a public
document, this paragraph shall become null and void.
30. ASSIGNMENT. Except as otherwise provided herein, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the
Company and the Executive and their respective heirs, legal
representatives, successors and assigns. If the Company shall be merged
into or consolidated with another entity, the provisions of this
Agreement shall be binding upon and inure to the benefit of the entity
surviving such merger or resulting from such consolidation.
31. ENTIRE AGREEMENT. This Agreement, with the plans and grant agreements
referenced herein, along with the Change in Control Agreement
referenced in paragraph 16, and the mortgage and promissory note
executed between the Executive and the Company, contains the entire
understanding and agreement between the Parties concerning the subject
matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral,
between the Parties with respect thereto.
-9-
32. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the
Executive and an authorized officer of the Company. No waiver by either
Party of any breach by the other Party of any condition or provision
contained in this Agreement shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the
Executive or an authorized officer of the Company, as the case may be.
33. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.
34. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment
to the extent necessary to the intended preservation of such rights and
obligations.
35. BENEFICIARIES/REFERENCES. The Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit
payable hereunder following the Executive's death by giving the Company
written notice thereof. In the event of the Executive's death or a
judicial determination of the Executive's incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to
refer to the Executive's beneficiary, estate or other legal
representative. Absent any written notice the beneficiary shall be the
Executive's estate.
36. APPROVAL & AGREEMENT. Upon the execution of this Agreement, the
Executive understands and agrees that:
(a) Upon the execution of this Agreement, the Executive will cease
to be employed by Polaroid Australia Pty. Limited;
(b) Any and all employment or expatriate agreements, excluding the
Change in Control Agreement referenced above, that have been
entered into between the Company or one of its subsidiaries
and the Executive shall be null and void, specifically the
Executive's temporary expatriate agreement, dated 17 May 1999;
(c) The Executive will commence employment with Polaroid
Corporation; and,
There is no automatic right to re-employment with Polaroid Australia Pty.
Limited either on the same or different terms as before, with or without a break
in employment.
37. GOVERNING LAW. This Agreement shall be governed by, construed, and
interpreted in accordance with the laws of Massachusetts, in the United
States without reference to principles of conflict of laws.
38. NOTICES. Any notice given to a Party shall be in writing and shall be
deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid,
-10-
return receipt requested, duly addressed, if to the Company, to the
corporate headquarters, attention: Vice President, Human Resources,
with a copy to the General Counsel; and, if to the Executive, at the
Executive's home address on record with the Company.
39. HEADINGS. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
40. COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts.
41. WITHHOLDING. The Company may, to the extent required by law, withhold
applicable federal, state and local income and other taxes from any
payments due to the Executive hereunder.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
POLAROID CORPORATION
By: /s/ XXXXXX X. XXXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President,
Human Resources
/s/ XXX X. XXXXXX
-----------------------------------
Xxx X. Xxxxxx
-11-
